Latest news with #ScottLincicome
Bloomberg
4 days ago
- Business
- Bloomberg
President Trump Confirms Meeting With Putin
"Balance of Power: Late Edition" focuses on the intersection of politics and global business. On today's show, Cato Institute's General Economics Vice President Scott Lincicome shares his thoughts on the reaction to potential tariffs from the Trump administration on gold. James Jeffrey, Former US Ambassador to Iraq & Turkey, talks about President Trump confirming that he will meet with Russian President Vladimir Putin to talk about ending the war in Ukraine. Florida Democratic Congresswoman Debbie Wasserman Schultz discusses the Florida GOP's plan to potentially redraw congressional maps in the state. (Source: Bloomberg)
Yahoo
4 days ago
- Business
- Yahoo
Lincicome: Ton of Tariff Details Yet to Be Ironed Out
Cato Institute's General Economics Vice President Scott Lincicome shares his thoughts on the reaction to potential tariffs from the Trump administration on gold, overall tariff impacts to the global markets, and how tariffs might yet impact inflation and prices for US consumers. Scott Lincicome speaks with Joe Mathieu on the late edition of Bloomberg's "Balance of Power." Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Bloomberg
4 days ago
- Business
- Bloomberg
Lincicome: Ton of Tariff Details Yet to Be Ironed Out
Cato Institute's General Economics Vice President Scott Lincicome shares his thoughts on the reaction to potential tariffs from the Trump administration on gold, overall tariff impacts to the global markets, and how tariffs might yet impact inflation and prices for US consumers. Scott Lincicome speaks with Joe Mathieu on the late edition of Bloomberg's "Balance of Power." (Source: Bloomberg)
Boston Globe
04-08-2025
- Business
- Boston Globe
Trump's demand to trading partners: Pledge money or get higher tariffs
Advertisement The tactic was on display last week as Trump and his team rolled out a blitz of new trade agreements before a self-imposed Aug. 1 deadline. 'South Korea is right now at a 25% Tariff, but they have an offer to buy down those Tariffs,' Trump wrote on social media Wednesday. 'I will be interested in hearing what that offer is.' The next day, Trump agreed to impose a tariff of 15 percent on imports from South Korea. The lower rate came after South Korea agreed to make $350 billion in investments in the United States and purchase $100 billion of liquefied natural gas. South Korea is not the only country to make such pledges. Japan said it would establish a $550 billion fund for investments in the United States. The European Union indicated that its companies were poised to invest at least $600 billion. Advertisement To trade experts, the commitments raise the question of whether Trump is negotiating with trading partners or trade hostages. 'This is no doubt a global shakedown of sorts,' said Scott Lincicome, vice president of general economics at the right-leaning Cato Institute. 'The fact is that Trump is using US tariff policy to effectively force these terms upon less-than-willing participants.' But the vague nature of these informal commitments suggests that other nations might also be looking for creative ways to escape Trump's tariffs. Although tariffs are relatively straightforward to enforce, investment and purchase commitments are not as easily policed. The EU, for instance, does not have the authority to dictate the type of investments that it has promised, and much of Japan's pledged investments are coming in the form of loans. The investment announcements have also spurred confusion and lacked the usual detail that would accompany such pacts to avoid future disputes. A large majority of the $350 billion South Korean investment would take the form of loans and loan guarantees. South Korean officials expressed confusion over what US officials meant when they said 90 percent of the profits from the investments would go to the American people. A fact sheet announcing the EU's plans allowed for some wiggle room when it said that 'E.U. companies have expressed interest in investing at least $600 billion' in 'various sectors in the U.S.' 'I think there remain a lot of questions, including by the countries who have announced commitments, as to what those commitments actually really mean,' said Michael Froman, president of the Council on Foreign Relations, who served as the top trade negotiator in the Obama administration. 'Is it enforceable? If they don't deliver a certain amount of investment over a particular period of time, do tariffs go back into place?' Advertisement During Trump's first term, the trade deal he struck with China included extensive commitments for Chinese purchases of American farm products that were never met. The agreement did have an enforcement mechanism, but it proved toothless. Some of the initial investment pledges appear to be too big to be true. New data from the Bureau of Economic Analysis showed that in 2024, foreign spending to acquire, start or expand US businesses totaled $151 billion — a small fraction of the new commitments being announced. The $600 billion EU investment commitment matches the total value of the goods that the United States imported from Europe last year. Although the United States has long been a magnet for foreign investment, the longer-term effects of making countries invest under duress are not clear. 'This is the kind of deal you'd more expect to see from an emerging market that can't attract capital on its merits,' said Aaron Bartnick, who worked in the White House Office of Science and Technology Policy during the Biden administration. 'And we may find over time that if the United States insists on acting like an emerging market, our trade partners may start treating us accordingly, with more onerous terms and less favorable rates that American companies and consumers are not accustomed to dealing with.' Regardless of the economic implications, Trump's tactics show no signs of abating, as he regularly claims more than $10 trillion — and climbing — in investments from foreign companies and countries. Advertisement Daniel Ames, a professor at Columbia Business School who teaches negotiation strategy, said that Trump's approach to trade deals appears to be drawn directly from his days as a developer and businessperson. Trump became notorious for destabilizing his negotiating counterparts with severely low bids, dazzling sales pitches and an ability to capitalize on weakness to gain leverage. Ames noted, however, that the EU and countries like Japan and South Korea might also be playing into Trump's sense of vanity when they unveil whopping investment promises that might ultimately be hollow. 'Donald Trump is a gifted storyteller, and I think when his counterparts recognize this, they can play to it,' Ames said. 'If you're negotiating with a narcissist, you look for ways to make them feel like they've won.' This article originally appeared in .
Boston Globe
01-08-2025
- Business
- Boston Globe
Trump injects new dose of uncertainty in tariffs as he pushes start date back to Aug. 7
Get Starting Point A guide through the most important stories of the morning, delivered Monday through Friday. Enter Email Sign Up The vast tariffs risk jeopardizing America's global standing as allies feel forced into unfriendly deals. As taxes on the raw materials used by U.S. factories and basic goods, the tariffs also threaten to create new inflationary pressures and hamper economic growth — concerns the Trump White House has dismissed. Advertisement Questions swirl around the tariffs despite Trump's eagerness As the clock ticked toward Trump's self-imposed deadline, few things seemed to be settled other than the president's determination to levy the taxes he has talked about for decades. The very legality of the tariffs remains an open question as a U.S. appeals court on Thursday heard arguments on whether Trump had exceeded his authority by declaring an 'emergency' under a 1977 law to charge the tariffs, allowing him to avoid congressional approval. Advertisement Trump was ebullient as much of the world awaited what he would do. 'Tariffs are making America GREAT & RICH Again,' he said Thursday morning on Truth Social. Others saw a policy carelessly constructed by the U.S. president, one that could impose harms gradually over time that would erode America's power and prosperity. 'The only things we'll know for sure on Friday morning are that growth-sapping U.S. import taxes will be historically high and complex, and that, because these deals are so vague and unfinished, policy uncertainty will remain very elevated,' said Scott Lincicome, a vice president of economics at the Cato Institute. 'The rest is very much TBD.' The new tariffs build off ones announced in the spring Trump initially imposed the Friday deadline after his previous 'Liberation Day' tariffs in April resulted in a stock market panic. His unusually high tariff rates unveiled then led to recession fears, prompting Trump to impose a 90-day negotiating period. When he was unable to create enough trade deals with other countries, he extended the timeline and sent out letters to world leaders that simply listed rates, prompting a slew of hasty agreements. Swiss imports will now be taxed at a higher rate — 39% — than the 31% Trump threatened in April, while Liechtenstein saw its rate slashed from 37% to 15%. Countries not listed in the Thursday night order would be charged a baseline 10% tariff. Trump negotiated trade frameworks over the past few weeks with the EU, Japan, South Korea, Indonesia and the Philippines — allowing the president to claim victories as other nations sought to limit his threat of charging even higher tariff rates. He said on Thursday there were agreements with other countries, but he declined to name them. Advertisement Thursday began with a palpable sense of tension The EU was awaiting a written agreement on its 15% tariff deal. Switzerland and Norway were among the dozens of countries that did not know what their tariff rate would be, while Trump agreed after a Thursday morning phone call to keep Mexico's tariffs at 25% for a 90-day negotiating period. The president separately on Thursday amended an order to raise Canada's fentanyl-related tariffs to 35%. European leaders face blowback for seeming to cave to Trump, even as they insist that this is merely the start of talks and stress the importance of maintaining America's support of Ukraine's fight against Russia. Canadian Prime Minister Mark Carney has already indicated that his country can no longer rely on the U.S. as an ally, and Trump declined to talk to him on Thursday. India, with its 25% tariff announced Wednesday by Trump, may no longer benefit as much from efforts to pivot manufacturing out of China. While the Trump administration has sought to challenge China's manufacturing dominance, it is separately in extended trade talks with that country, which faces a 30% tariff and is charging a 10% retaliatory rate on the U.S. Major companies came into the week warning that tariffs would begin to squeeze them financially. Ford Motor Co. said it anticipated a net $2 billion hit to earnings this year from tariffs. French skincare company Yon-Ka is warning of job freezes, scaled-back investment and rising prices. It's unclear whether Trump's new tariffs will survive a legal challenge Federal judges sounded skeptical Thursday about Trump's use of a 1977 law to declare the long-standing U.S. trade deficit a national emergency that justifies tariffs on almost every country on Earth. Advertisement 'You're asking for an unbounded authority,' Judge Todd Hughes of the U.S. Court of Appeals for the Federal Circuit told a Justice Department lawyer representing the administration. The judges didn't immediately rule, and the case is expected to eventually reach the Supreme Court. The Trump White House has pointed to the increase in federal revenues as a sign that the tariffs will reduce the budget deficit, with $127 billion in customs and duties collected so far this year — about $70 billion more than last year. New tariffs threaten to raise inflation rates There are not yet signs that tariffs will lead to more domestic manufacturing jobs, and the U.S. economy now has 14,000 fewer manufacturing jobs than it did in April. On Thursday, one crucial measure of inflation, known as the Personal Consumption Expenditures index, showed that prices have climbed 2.6% over the 12 months that ended in June, a sign that inflation may be accelerating as the tariffs flow through the economy. The prospect of higher inflation from the tariffs has caused the Federal Reserve to hold off on additional cuts to its benchmark rates, a point of frustration for Trump, who on Truth Social, called Fed Chair Jerome Powell a 'TOTAL LOSER.' But ahead of Trump's tariffs, Powell seemed to suggest that the tariffs had put the U.S. economy and much of the world into a state of unknowns. 'There are many uncertainties left to resolve,' Powell told reporters Wednesday. 'So, yes, we are learning more and more. It doesn't feel like we're very close to the end of that process. And that's not for us to judge, but it does — it feels like there's much more to come.' Advertisement AP writer Paul Wiseman contributed to this report.
